Vornado Realty (VNO) Q3 2026 Earnings Call Transcript

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DATE

Tuesday, Nov. 3, 2026

CALL PARTICIPANTS

• Executive Vice President and Corporation Counsel - Steven J. Borenstein
• Chairman and Chief Executive Officer - Steven Roth
• President and Chief Financial Officer - Michael J. Franco

TAKEAWAYS

• Adjusted FFO -- $0.65 per diluted share, representing a 14% increase from $0.57 in the prior year quarter, driven by rent commencements at PENN1 and PENN2.
• Net Loss -- $47.1 million attributable to common shareholders, or $0.25 per diluted share, reflecting interest expense and non-cash depreciation items compared to net income of $11.6 million last year.
• New York Office Same-Store NOI -- growing 11.9% on a GAAP basis and 8.7% on a cash basis, as rents in the Class A-plus subsegment continue to rise.
• 350 Park Avenue JV -- valuing the contributed land at $900 million and securing a $3.3 billion construction loan at SOFR plus 3.00% for the development of a 1.9 million square foot tower.
• Manhattan Office Leasing -- totaling 489,000 square feet in the third quarter at an average starting rent of $123 per square foot with mark-to-markets of 37.2% GAAP and 25.9% cash.
• PENN1 Occupancy -- reaching 96% leased with 1.8 million square feet of space leased since the physical redevelopment began.
• PENN2 Occupancy -- standing at 92% with available space reduced to 150,000 square feet and deal pricing currently between $125 per square foot to $135 per square foot.
• 555 California Street Rents -- averaging $163 per square foot for 55,000 square feet of third quarter leasing, marking a 59% GAAP mark-to-market increase.
• Signage and Service Income -- generating $120 million in combined income from signage, cleaning, and security businesses, including a signage CAGR of 16% over the last five years.
• Liquidity -- totaling $1.9 billion as of Sept. 30, comprised of $724 million in cash and restricted cash and $1.2 billion in undrawn credit lines.
• New York Office Occupancy -- reported at 91.5% at Vornado's share, reflecting a portfolio-wide recovery in tenant demand.
• Signed Revenue Pipeline -- amounting to $204 million from signed leases not yet included in GAAP results, which management expects will flow into income over the next five quarters.
• Share Repurchases -- buying 4.5 million shares for $133.3 million at an average price of $29.41 during the first nine months of the year.
• Asset Sale Proceeds -- anticipated to exceed $1 billion from two properties currently in advanced stages of negotiation to improve liquidity.
• 623 Fifth Avenue Development -- scheduled for delivery in the fourth quarter of 2027, with an initial 31,000 square foot lease signed near the budget-aligned rent of $200 per square foot.
• Park Avenue Plaza Acquisition -- acquiring a 49% interest for $950 per square foot in June 2026, which is expected to yield an 8% cash-on-cash return.
• New York Street Retail NOI -- rising 8.4% on a GAAP basis and 9.3% on a cash basis, driven by strong demand in Times Square and Fifth Avenue.
• Residential Development -- planning the early 2027 construction of a 480-unit rental building at 34th Street and 8th Avenue near the Moynihan Train Hall.
• Full-Year Leasing Forecast -- projecting total New York office leasing of approximately 2.4 million square feet for 2026.
• Senior Unsecured Notes -- completing a $500 million offering of 5.75% notes due 2033 to repay $400 million of maturing debt.

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RISKS

• Franco stated, "Pricing has been impacted a bit with the sharp jump in rates," referring to the slowdown in the investment sales market and its effect on transaction discussions.
• Franco warned that higher interest rates are expected to have a $0.10 impact on earnings next year, reflecting the current volatility in the capital markets.
• Management noted that taking retail and signage income offline for redevelopment in the Penn District will temporarily reduce earnings during the physical construction phase.

SUMMARY

Vornado Realty Trust (NYSE:VNO) reported a strategic emphasis on high-end Manhattan office and retail assets, noting that the Class A-plus market has shifted significantly in favor of landlords. Management indicated that vacancy in premier buildings has tightened to the mid-single digits, supporting rent increases that now frequently reach $200 per square foot to $300 per square foot in negotiations. The company is currently managing a significant pipeline of signed leases that are expected to contribute approximately $204 million in future annual revenue as occupancy stabilizes across the Penn District and Park Avenue portfolios. Additionally, the company is advancing its liquidity strategy through potential asset sales and the recent closing of a multibillion-dollar construction loan for its 350 Park Avenue joint venture.

• CEO Roth stated, "Citadel has an early call option to grow by additional up to 330,000 square feet," regarding the anchor tenancy at the new 350 Park Avenue development.
• The company's signage business has become a major contributor to capital-light income, with its Penn District assets now producing nearly double the income of its Times Square holdings.
• Leasing executive Weiss indicated that office utilization in New York has reached four to five days a week, leading to an acceleration in tenant renewal discussions.
• Management confirmed that the next phase of the Penn District transformation will include the redevelopment of retail corridors on 7th Avenue and a new 480-unit residential project.
• The company reported that its return on cost for the 350 Park Avenue project is projected at 9.2% on an unlevered basis and over 13% on a levered basis.

INDUSTRY GLOSSARY

• FFO (Funds From Operations): A non-GAAP measure used by REITs that adds back depreciation and excludes gains or losses on property sales.
• NOI (Net Operating Income): Property-level income after operating expenses but before interest, taxes, and corporate overhead.
• Mark-to-Market: The percentage difference between current market rents and the prior rents on expiring leases for the same space.
• CAGR (Compound Annual Growth Rate): The geometric progression ratio that provides a constant rate of return over a multiyear period.
• Penn District: A multi-asset redevelopment project by Vornado centered around Pennsylvania Station in Manhattan.
• SOFR (Secured Overnight Financing Rate): A benchmark interest rate that replaced LIBOR for dollar-denominated commercial loans.

Full Conference Call Transcript

Operator: Thank you for holding. Your conference will begin in 5 minutes. Thank you for your patience. Good morning and welcome to the Vornado Realty Trust Third Quarter 26 Earnings Call. My name is Nick, and I will be your operator for today's call. This call is being recorded for replay purposes. All lines are in a listen only mode. Our speakers will address your questions at the end of the presentation during the question and answer session. At that time, please press star then 1 on your touch tone phone. I will now turn the call over to Mr. Steven J. Borenstein, executive vice president and corporation counsel. Please go ahead.

Steven J. Borenstein: Welcome to Vornado Realty Trust third quarter earnings call. Yesterday afternoon, we issued our third quarter earnings release and filed our quarterly report on Form 10-Q with the Securities and Exchange Commission. These documents as well as our supplemental financial information package are available on our website. Website, www.vno.com, under the Investor Relations section. In these documents and during today's call, we will discuss certain non GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP measures are included in our earnings release Form 10 Q and financial supplement.

Please be aware that statements made during this call may begin forward looking statements, and actual results may differ materially from these statements due to a variety of risks, uncertainties, and other factors. Please refer to our filings with the Securities and Exchange Commission including our annual report on Form 10-K for the year ended 12/31/2025 for more information regarding these risks and uncertainties. The call may include time sensitive information that may be accurate only as of today's date. The company does not undertake a duty to update any forward looking statement. I will now turn the call over to Steven Roth.

On the call today from management for our opening comments are Stephen Roth, Chairman and Chief Executive Officer and Michael J. Franco, President and Chief Financial Officer. Our senior team is also present and available for questions. I will now turn the call over to Steven Roth.

Steven Roth: Thank you, Steven, and good morning, everyone. On behalf of my hardworking colleagues at Vornado, it is my pleasure to welcome you to our third quarter call. Today is election day. Elections matter, our democracy matters, and your vote matters. New Yorkers are choosing a governor, and across the country, voters are choosing a congress. We have a system of early voting, mail in voting, and in person voting. Please make sure that you vote. If you work at Vornado, you are entitled to half a day off to facilitate your voting.

We have a lot to talk about this morning, but first, I want to mention something that is important to me and should be important to all of us. 2 Wednesdays ago, Daryl and I attended the inaugural Blue Square Alliance Against Hate Benefit Gala. Blue Square is an organization created by Robert Kraft in 2019, in reaction to the very disturbing increase in antisemitism across America. And that now combats hate of all kinds. Robert Kraft is a 5-foot 7-inch giant. He is self funding this organization. And Daryl and I believe we should all follow his lead. Now to business. We had another excellent quarter with eye catching market mark to market results. And same store growth.

Comparable FFO was $0.65, up $0.08 or 14% from last year's quarter. and $0.02 ahead of analyst consensus. A few. In a few minutes, Michael will review all the numbers in detail. But first, let me cover some highlights. We are the last New York office company reports so we can see the competitive playing field clearly in front of us. Everyone's metrics were pretty good. But our metrics were outstanding in first place, and second place was not even close.

As we have been predicting on these calls for the past 9 quarters, everyone, and I mean everyone, analysts, investors, the press, and even out of town office companies, now agree that the New York market is by far the strongest in the country and maybe even the strongest that it is ever been. As I have said over and over, we compete in the market of about 180 million square foot Class A-plus buildings where demand for space is accelerating and the availability of good space is quickly evaporating. We are most definitely in the landlord's market, and most importantly, tenants and brokers know it and are acting accordingly.

Economics 101 says that with demand surging and supply not keeping pace, rents will rise and they are and there is no end in sight. $200, $200 and $300 rents are now common in the conversation. Overall, Manhattan office leasing volume was up more than 9% from last year. And total leasing in 2026, is on pace to reach the highest total since 2000. During the third quarter, overall Manhattan office leasing was a strong 10 million square feet, exceeding both the 5-year and 10-year quarterly average. 0.25%, 27% of deal volume. And by the way, there are more postings for AI jobs in New York than any other market in the country by a wide margin.

Vacancy in the 180 million square foot Class A-plus building market in which we compete continues to tighten and is now down to the mid single-digits. There is a serious shortage of large blocks in the better buildings, and new supply is minimal. Takes as long as 5 years to deliver and requires rents upwards of $300 per square foot to pencil. Given these dynamics, we expect class a rents to continue to grow. Well into the next decade. That tells you everything about the strength of the demand in our market. I could not be more bullish.

And by the way, the 10 year treasury run-up to 5% may be impeding the supply of new builds, but it is seems to be having absolutely no effect on tenant demand. Vornado's best in class assets and ability to attract and retain an outstanding roster of tenants, including many of the world's leading companies, continues to set the standard for the New York office market.

With the investments that we have made throughout the years and over the past year in such assets, as Park Avenue Plaza, 623 Fifth Avenue, and 350 Park, We now have a concentration of premier assets around the 2 most important transportations hubs in the city, in the Penn District and in the Plaza/Park Avenue. No other investable company has both. Our portfolio of assets with best in class amenities is exactly what tenants are seeking, and we continue to achieve market-leading rents and a very significant mark-to-market results. To achieve market leading rents and a very significant mark to market results. Here is our scorecard.

In the first 9 months of 2026, we leased 1.6 million square feet company wide. For Manhattan office, we leased 1.15 million square feet at $113 per square foot average starting rents. With mark-to-markets of 23.5% cap, and 16.8% cash. As you will hear in the next paragraph, these metrics are accelerating as rents continue to rise even quarter by quarter. As I mentioned during our last call, these mark to market stats do not include our leasing activity at PENN2. We are following our transformation. We are achieving rents that are about double the old rents. That would translate to a 100% mark-to-markets. But our numbers do include all of our assets even our few clunkers.

Everyone has clunkers, even us. No cherry picking for us. In the fourth quarter, we will recognize the 1.05 million square foot Citadel lease. And so we can now forecast that Manhattan office leasing for the full year 2026 should be about 2.4 million square feet. In the third quarter in Manhattan, we executed 30 office deals totaling 489 thousand square feet at an industry leading average starting rent of a $123 per square foot. With an average term of 9.5 years. Mark-to-markets were a whopping 37.2% GAAP and 25.9% cash. Our budget show that this strong performance will continue through 2028. This quarter, our New York office same store NOI was up 11.9% GAAP and 8.7% cash.

Our New York Street retail same store NOI was up 8.4% GAAP and 9.3% cash. Our New York business overall which includes Alexander's, was up 10.2% GAAP and 4.9% cash. Or 8.4% cash if excluding Bloomberg's rent abatement at 731 Lexington that we advance forward 5 years for tax reasons. Our signed leases that are not yet included in our GAAP results are $204 million of revenue, which since the taxes and operating expenses are already included at the building level, which will almost entirely drop to the bottom line. This will feed into our income over the next 5 or so quarters. Phase 1 of our award winning and redevelopment of the Penn District is now complete.

With the new Moynihan Train Hall, and a 730 thousand square foot Moynihan Office Complex, The New and Expanded and Fully Retenant Long Island Railroad Concourse, the adjacent food hall and 70 new or reconstructed food and beverage offerings, the 33rd Street pedestrian plaza, and the fully transformed and super amenitized 2.5 million square foot PENN1 and 1.8 million square foot PENN2. So this is a good time to render a report card. Capital spent to create all this was $2.5 billion. On budget and very well worth it. As you remember, we prefunded the capital required here, which turned out to be pressured. We continue to have no debt on the major Penn District assets.

Since its physical redevelopment at PENN1, we have leased 1.8 million square feet at average starting rents of $98. During the third quarter at PennOne, we executed 10 deals totaling 248 thousand square feet at average starting rents of $123. And an average mark to market of 40%. The office space here is now 96% leased. But roughly 10% of PENN1 rolls each year, so we will keep marching old rents up the market. This includes 400 thousand square feet of currently paying only $68 per square foot, which rolls over the next 3 years plus another 83 thousand square feet of vacancy to lease. So there is much growth still to come here.

At the 1.8 million square foot PENN2, we have leased over 1.6 million square feet since project inception. Putting us at 92% occupied with availability now of only 150 thousand square feet. Rents at PENN2 continue to exceed even our own optimistic expectations with deal makings now squarely in the $125 to $135 per square foot range. Tour activity and proposals across the remaining space remain at robust levels. We continue to escalate our rents here to match market demand. We have created something truly unique at Penn. Together with our neighbors Manhattan West and Hudson Yards, we are part of the new West Side of Manhattan, as well as being our own city within a city.

Most importantly, tenants and the public love what we have done. Now the financial benefits of all this are enormous. Old rents will rise to market. And importantly, Penn's current market rents will rise to the levels at Manhattan West and Hudson Yards. And we are seeing that happen day by day. Phase 1 may be complete. But we continue to invest in the transformation of the Penn District. We will develop the tired, old, and junky retail on both sides of 7th Avenue and along 34th Street into attractive, modern, and exciting retail offerings. This is the gateway to our Penn District, and the transformation here will have big impact.

We will also develop a 480-unit rental residential building. on the 34th Street and 8th Avenue, site across from the Train Hall. Both of these projects will begin physical construction early next year. Phase 2 at Penn District will be every bit as exciting and productive and will include PENN15 and various other potential sites. There is a lot of chatter in the industry about fee income and a lot of Blackstone and Brooks envy in REIT land. We have our fair share of fee income. But even better than that, I want to call attention to 2 of our high growth businesses that get little attention.

First, we have the largest and best signage business in Manhattan, which has grown at a 5% CAGR over the last 10 years and 16% CAGR for the last 5 years. Our sign concentrations are on the 2 best blocks in Times Square's bowtie where we own 50% with our retail JV partners. And in the Penn District where we own it all. By the way, Penn is the principal contributor to the 5 year CAGR and now its share produces nearly double the income of Times Square for us.

What differentiates our sign business from others is, of course, our unique high traffic real estate and that we own all the signs which are attached to the real estate that we own. There are no leases, no expiration dates, no renewals, which equates to high margins and high values. Further, we are 1 of the few landlords that own our cleaning and security business, which services all of our buildings, giving us better control and better profits. Together, these 2 capital light businesses currently produce $120 million of income, and they are growers. We have recently added to our holdings in the Plaza/Park Avenue district.

With the acquisitions of 623 Fifth Avenue, Park Avenue Plaza, 3 East 54th Street, and 350 Park Avenue. Which adds to 1.29 thousand Avenue of the Americas, 280 Park Avenue, 645 Fifth Avenue, 689 Fifth Avenue, 655 5th Avenue, 697 5th Avenue, and 595 Madison Avenue. Our 623 Fifth Avenue development project is expected, spectacularly well located on top of Saks Fifth Avenue is on schedule. We will deliver to tenants in the fourth quarter of 27. We signed our first lease here with a financial services firm for 31 thousand square feet across 2 floors at an on budget starting rent close to $200 per foot.

The market reception to this high end hospitality driven project designed by Foster and Partners has been terrific. Tour volume is very strong, and we are currently negotiating multiple other deals. In May, we acquired a 49% interest in Park Avenue Plaza for $950 per square foot. Which taking advantage of a low interest rate loan through 2030 would yield an 8% cash on cash return. This is a building with blue chip tenants. We love the low bases here, and even more so, we love the below market rents. Good things are happening here as we speak.

In a milestone event just after quarter end in October, We formally closed the 350 Park Avenue joint venture with Ken Griffin as our 60% financial partner, Vornado owning 36%, and the Rudin family owning the remaining 4%. Simultaneously, we closed on a $3.3 billion construction loan which is a record for an office deal and a 1.05 million square foot lease with Ken Griffin Citadel. We disclose on page 21 of our financial supplement the cost and returns of this project. Our return on cost is over 9%. Note that this is an unlevered return. The levered return is over 13%.

Our 350 Park Avenue tower is being designed by the same Foster and Partners team that designed the new JPMorgan headquarters down the block. 350 is huge at 1.9 million rentable square feet, and topping out at 1.4 thousand feet. Citadel has an early call option to grow by additional up to 330 thousand square feet. With the early betting is that they will take it all. That leaves 520 thousand square feet of 20 floors of column free, high ceilings floor to ceiling windowed space at the very top of the building actually be. Beginning 850 feet in the air. All with majestic 360-degree panoramic views up to the park and down to the harbor.

Glen and his team will be leasing this space on behalf of the venture. I hope you all saw our full page ad in the Wall Street Journal last Thursday announcing the project. And clearly showing the available block. This block is the best available space on offer. And we are bringing it to market at exactly the right time. And I must say Ken has been a perfect partner. And his team as well. Ken has been personally involved in all major design decisions to create the most efficient workspace. And world class aesthetics.

At our 2 million square foot 1.29 thousand Avenue of the Americas, many of you have toured our new amenity space and recognize them as best in class and tenants are reacting accordingly. Since inception of our hospitality driven transformation focused on our new pavilion and outdoor terrace space on the 17th floor. We have leased 650 thousand square feet to new tenants at rents that are leading the pack on 6th Avenue. The building is currently 97% occupied with an upcoming opportunistic expiry of 240 thousand square feet next year, where we have lots of activity. We acquired 1.29 thousand and 555 California Street in 2007, at the same time.

1.29 thousand is now the best building on Avenue of the Americas. And 555 California Street is the best building in San Francisco. Michael will have the pleasure of reporting to you the extraordinary leasing success of 555 California validating its leadership in the market. In the for what it is worth department, I think NAV is a meaningful metric. Green Street has our NAV at $56 per share, which means our stock price trades at a 38% discount The deepest discount in our office group. Last quarter, I told you we were in conversations to sell 2 assets, which would substantially increase our liquidity. Both are well advanced, and we expect to report more on our next call.

We all thought that the monster Wall Street law firms were forever institutions and creditworthy to boot. But as I read in the recent news, this is apparently not the case. But more relevant to us is that law firms' hourly billing rates have now risen to unreasonable levels. We need to fix that and we are beginning to focus. I end with this. Halloween was a couple of days ago, I have a 10-year-old grandson who is a trick or treater. We just switched over to daylight savings time, and all my friends are heading down to Florida for the winter. Thanksgiving is a few weeks away. Thanksgiving is a unique American holiday celebrated with a family feast.

Since I have been boss, we have celebrated Thanksgiving by giving every single employee, no matter their rank, a Thanksgiving turkey. In the beginning, we were a small New Jersey suburban company Everybody drove to work, so we loaded frozen turkeys onto a truck. And handed them out 1 by 1. This is no longer possible today since we now have thousands of employees and everybody commutes to work using mass transit. So we need. Now give out a monetary voucher sufficient to buy a turkey and all the fixings. I must say I find this many decades old tradition very personally satisfying. Happy Thanksgiving to everybody. Now over to Michael.

Michael J. Franco: Thank you, Steven, and good morning, everyone. Third quarter comparable FFO was $0.65 per share, compared to $0.57 per share for last year's third quarter. An increase of 14% or $0.08. This increase was primarily due to higher FFO resulting from rent commencements, primarily at PENN1 and PENN2. Net of lease expirations. Higher FFO from our acquisition of Park Avenue Plaza and higher NOI from signage revenue. Partially offset by higher net interest expense largely due to the increase in rate on our 2033 senior bonds versus the retired bonds. We have provided a quarter over quarter bridge on page 3 of our earnings release and on page 7 of our financial supplement.

As Steve said, and it is worth repeating, this quarter, our New York office same store NOI was up 11.9% GAAP and 8.7% cash. Our New York Street retail same store NOI was up 8.4% GAAP and 9.3% cash. Overall, our New York business was up 10.2% GAAP and 4.9% cash. But more accurately, 8.4% cash excluding Bloomberg's rent abatement at 731 Lexington Avenue, which we accelerated for tax reasons. Based on our 2027 budget, we expect these strong same store growth numbers to continue through next year. In terms of our earnings outlook, we have previously mentioned, full year 2026 comparable FFO will be higher than 2025.

While we are still in the process of finalizing our 2027 budget, we still expect the current quarter to be a reasonable run rate through 2027 notwithstanding the additional impact of taking income offline to effectuate the 30 fourth and seventh retail redevelopment and from a higher interest rate environment. Indicated on our previous calls, we expect significant additional growth in 2028 and beyond. Turning to occupancy. Our New York office occupancy increased 80 basis points this quarter to 93%. Up from 88.4% at this time last year. Last quarter, we said we expected to be north of 93% by year end so we are already ahead of plan.

In addition to the just completed 1.05 million square foot Citadel lease 53 Park, A New York office leasing pipeline remains strong. With another 1.1 million square feet. As we look toward year end, we projected total office leasing in New York should be about 2.4 million square feet for 2026. Which comes on the heels of our 3.7 million square feet of leasing in 2025. Put it simply, we are firing on all cylinders at Vornado. We are now laser focused on leasing 623 Fifth and 350 Park. Speaking of 350 Park, believe this is a big win, not just for Vornado, but also for New York. The project delivers on the promise of the greater East Midtown rezoning.

An idea that Steven first proposed in his 2009 chairman's letter after returning from London and seeing what that city had done. And then it was championed by others here. Our project contributed a combined $150 million towards the upkeep of Saint Patrick's Cathedral and Saint Bartholomew's Church. Through the purchase of their development rights. Plus more than $35 million for the city's East Mid Public Realm Improvement Fund, which will help fund the Park Avenue malls. With the robust demand for scarcity of trophy office space available, the new 350 Park will serve a growing need by the world's leading companies. In the premium space to attract and retain talent here.

At the end of the day, though, it is all about the money. And the transaction is enormously attractive to Vornado as a developer and owner operator. With our land marked up to a $900 million contribution value, the project cancels to a 9.2% return on cost to Vornado, as you can see on page 21 in our supplement. Assuming we do not bring in any capital partners, our incremental capital investment of $290 million will start in the middle of 28 with the bulk 2029 through 2031. We could not be more excited about this project and the value it will create for our shareholders. The retail market continues to experience healthy activity as well.

There is strong demand for the best locations, and rents have returned close to or at peak levels. We signed a 10-year renewal of Sephora and Times Square this quarter, We had significant activity out of their Times Square ads at 1.54 thousand Broadway. Pipeline is strong for 5th Avenue in the Penn District also. In San Francisco, our 555 California Street comp the best building in town. Continues to lead a market that is coming back fast. San Francisco tenant demand is at a record 8.4 million square feet. Of which 60% is from AI and tech. And asking rents are up almost 10% year over year.

This quarter, we leased 55 thousand square feet, and an average starting rent of $163 per square foot. Our highest ever. With mark to market at the positive 59% gap and positive 38% cash. Year to date, we have leased 166 thousand square feet, and we have another 155 thousand square feet of deals pending. Turning to the capital markets. The backdrop has gotten more volatile over the past couple of months. But the markets remain open for quality New York assets. CBS spreads have widened modestly, but New York class a office refinancings continue to be very well received. The unsecured bond market remains open for office REITs also.

Our 33 bonds now trade about a 160 basis points over treasuries. 30 to 40 basis points higher than on April, So all in new issue rates are higher given the higher base rates. Given the recent volatility and move in rates, we are pleased we completed over $4 billion in refinancings early in the year, when the markets are more favorable. In the investment sales market, the pace of transactions has slowed, and pricing has been impacted a bit with the sharp jump in rates. But capital remains very interested in New York, and deals are getting done. Finally, turning to our balance sheet. Our liquidity is $1.9 billion.

Comprised of $724 million of cash and restricted cash $1.2 billion of undrawn credit lines. With that, I will turn it over to the operator for Q&A.

Operator: Okay. Thank you. We will now begin the question and answer session. If you have a question, please press star then 1 on your touch tone phone. If you wish to be removed from the queue, please press star then 2. If you were using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press star. Then 1 on your touch tone phone. Each caller will be allowed to ask a question and a follow-up question before we move on to the next caller. The first question will come from Floris van Dijkum with Ladenburg. Please go ahead.

Floris van Dijkum: Good morning, guys. Thanks for taking my question. Couple of things I wanted to ask you. Steven, I was I was actually very intrigued by your comments on the on the retail market. Obviously, you know, your New York retail same store was up 9 points, over 9%. Maybe if you could touch on there is still a lot of vacancy in your in your New York retail. What was the peak vac.

You know, what was the peak occupancy, and what kind of mean, ballpark here, is there, like, a $90 million, almost $100 million NOI up upside, you know, getting, you know, back to peak Could you maybe talk a little bit more about what you see happening in the in the retail portfolio?

Steven Roth: Good morning, Floris. Thanks. So Tom and Michael, if we lease up all of the vacancies in the retail portfolio, how much income does that generate? that is really Floris' question.

Thomas Sanelli: I would say it is approximately $50 million. Yes.

Michael J. Franco: I was gonna say about $50 million.

Steven Roth: About 50 million. I think it is more than that, but my financial geniuses think that if we lease if we get to a 100% occupancy or stabilized occupancy at retail, that would increase our income by $50 million.

Floris van Dijkum: Great. that is helpful. that is certainly incremental, you know, to where we stand today. The other question I had is, obviously, you have got some pretty exciting development projects, and you got potential capital required for PENN15 as well. You have got, I think, $360 million of unencumbered NOI. As you think about how will you potentially fund the capital that is required to build out this magic massive project at PENN15, how do you think about sources and uses for that?

Steven Roth: Well, before we get to PENN15, we have got a lot of unbelievable stuff on the on our plate. So we have got 623 Fifth Avenue. We have got obviously, 350 Park Avenue, What am I forgetting?

Michael J. Franco: 34th.

Steven Roth: 34th And 8th.

Michael J. Franco: 34th And 8th.

Steven Roth: We have got the 3 Retail Redevelopment. 8th Avenue apartment house. So we have multiple new high growth projects on our plate. All of that is already funded. We have we have capital allocated for everything that we are doing that we have already started. So that is behind that is behind us. 50 And 10 is a project that when we when. I mean, you know, it is probably a fair amount of time away. As we get into it, we will capitalize Okay? We have not decided how we are going to do it yet, but it is it is. Because it is really not that it is not prudent yet.

Operator: The next question will come from Steve Sakwa with Evercore ISI. Please go ahead.

Steve Sakwa: Yes, thanks. Good morning. Michael, I guess I wanted to go back to some comments that you made. Talked about the kind of sign, but not occupied, you know, a little over $200 million, which is, you know, kind of roughly $1 or so in incremental FFO. But it sounds like there is some offsets. You know, I guess, there is this $12.90 move out. there is some of the retail you are taking offline. Are there other just kind of move outs that might be known in the first half of the year that kinda might be weighing down the near term earnings trajectory that as you backfill that space, that provides more upside in the 2028?

Michael J. Franco: Yeah. I think I think. Morning, Steve. You know, there are a few things. Look, I think the magnitude of the 200, I think, is pretty, staggering. And reflects, in particular, the success of Penn. You know, the offsets are, like, we are we are we are in the normal know, leasing business. there is gonna be expiries and move outs. You know, in particular, we got 102, as you said. 330 West 34th. 888 Seventh Avenue, You know, we are taking the retail offline at 34th, 7th and also taking the sign offline which we decided to do recently. Given we think the greater potential we are gonna bring back.

So that will take a little more income offline year than we originally anticipated. And then, you know, we are gonna have with rates being higher, that probably has a, let's call it, $0.10 impact next year. So you know, those are the big picture items. But eventually, you know, that will all get leased back up and that will flow through over time.

Steven Roth: Okay. Great. I see it. The fact is that the pipeline the financial pipeline of having $200-odd million of signed in the bag revenue that will flow through our income statement over the call it 5 quarters or whatever. Nobody has anything like that, and it is it is a testament to the enormous success of our Penn District project. and a testament also to the fact that we will have by far the highest growth that our segment by far. And I guess that is 1 of the reasons why we have a multiple that shows that. So we are pretty proud of all that.

Steve Sakwa: Great. Thanks, Steven, for that follow-up. Maybe just 1 for Glen, just kind of on the overall leasing pipe and just sort of tenant activity. And, you know, just sort of, you know, what are kind of the tenant mindset today given strong profitability out of the corporates? Maybe offset a little bit by uncertainty over just kind of the AI workforce? What are tenants telling you and, you know, how far out are you starting to see tenants coming to you for renewals in places like New York and San Francisco.

Glen J. Weiss: So we have never seen it as strong as it as it is right now. Not even close. Every industry, class, every property, tenants are rabid for space, lots of expansions, and AI has complemented that. Know, there is been a lot of AI leasing, a lot of AI job growth in Manhattan. So we have never seen a better In addition, tenants are less rent sensitive than I have ever seen. And are less sensitive about length of term as well. So it is all boding great for our business.

Operator: The next question will come from John Kim with BMO Capital Markets. Please go ahead.

John Kim: Thank you. Steven, I wanted to ask on your I guess, your statement that lease spreads will continue through 2028. This quarter was at 26% on a cash basis. I am wondering if there were leases in a couple of buildings that drove that figure higher, or is that widespread throughout your portfolio? And can these lease spreads extend beyond 2028?

Steven Roth: The number 2028 I focused on because that is really the length of our planning 2 years out, 2.5 years out. So, you know, I cannot tell you what is gonna happen in 2029 and 2030. Because our budgets do not yet extend out to that period.

Michael J. Franco: But I would say, John, got a couple things to tack on. I think Steven in his in his remarks referenced the mark-to-markets at either PENN or at PENN1 You know, PENN1 we are consistently achieving mark to markets in excess of the 26%. Again, reflecting the transformation there. And if you think about what is happening in the market generally where rents are going up, let's just say 5% to 10%. You know? I think they are going up higher for the higher price, but let's just use 5 to 10%. If that continues, and given the, minute amount of new supply, we certainly think that it is going to continue. Maybe even accelerate.

Know, there is gonna be an increasing gap between what is expiring and where the market is. So well, we do not put, you know, hard numbers, you know, beyond 2028, you know, that sort of gap and potential mark-to-market should absolutely remain a strong possibility.

John Kim: Okay. And then my second question, I know you do not like to discuss guidance, but Michael, you did mention that this quarter is a good run rate for next year. That would put you at about $2.60. But you also talked about higher interest rates and redevelopment, the headwinds But that is still about $0.28 above 25's FFO, so it is below $0.40 uplift. Previously discussed for 2027. I am wondering if. what is happened besides interest rates that caused that know, that perceived shortfall?

Steven Roth: So, John, say you are you are a little muffled. Say that again.

John Kim: it is it is like it is a shortfall from the 40¢ previously indicated for 2022 to 2027 growth. I know some of that was pulled forward to 2026, but Yeah.

Michael J. Franco: I do not I do not I do not know if that is really the case, John. Know, some of that got pulled forward to this year. I think we all have you know, last year to 2027. I think it is still sort of similar magnitude. it is been some positives and negatives. Right? I mentioned taking a little bit more offline in 2034 and 7. Higher rates. At the same time, you have some positive leasing fundamentals. So net, I do not I do not know if that is really, where we changed that view at all.

Operator: Next question will come from Nicholas Yulico with Scotiabank. Please go ahead.

Nicholas Yulico: Thanks. I just wanted to turn to 350 Park. If you could just maybe tell us from a modeling standpoint, if we could think about like the accounting treatment, that is going to start in the fourth quarter, any nuances to think about there and how it could sort of incrementally impact FFO? Thanks.

Thomas Sanelli: Yes. So this is Tom. In terms of the accounting, we are basically gonna capitalize all expenses and I think we said it previously on a couple of calls earlier this year that it is basically gonna be a similar run rate where we were getting prior to the JV. So there really is not gonna be anything happening other than we believe we are gonna capitalize interest in cost, and some development fee income is gonna come in as well. And that should be approximately what we were getting prior to the structure. She's the 1 with the gold Okay.

Nicholas Yulico: Thanks. And then second question is maybe you just talk a little bit more about the leasing interest at 623 5th. Based on the deals you have you have done so far, sort of, you know, types of tenants and how are you thinking about, you know, are you pushing rents even further now for that, building? Thanks.

Glen J. Weiss: Hi. it is Glen. So, yes, we continue to push rents there weekly. Tour volume's enormous. it is a financial service building. Thing, private equity, think hedge fund types. Think family shops, etcetera. So we have signed our first lease. We have another 1 coming very soon and others behind that. So, you know, with the paucity of good supply in the Plaza District, it is the perfect time for 23. You know, construction's underway, and our timing is really good there. So we are we are feeling better and better as we go. Yep.

Operator: The next question will come from Jana Gellen with Bank of America. Please go ahead.

Jana Galan: Thank you. Good morning, and congrats on the strong results. Following up on the comments on the signage and the cleaning and security businesses, could there be opportunities to kind of monetize these in the future?

Steven Roth: These businesses are very valuable. I would say that respect to cleaning, we think cleaning is a strategic combination with owning the assets. We think that owning the cleaning business together with the real estate is a big, big plus. So I do not see I do not see selling that or monetizing that in the future. The sign business which is unbelievably interesting asset light business, which is growing like a weed So right now, I would rather hold the income for growth and than monetize it, although it has enormous value.

So if the signed business has the benefit of $100 million of income and growing, So you figure out what the multiple might be, and so it is a very, very, very valuable asset. That right now we are in the growing business, not in the selling business.

Jana Galan: Thank you, Steven. And then maybe just on the apartment projects, that is starting next year, if you could maybe share kind of expected yields and then when maybe those could that it could start delivering units?

Steven Roth: Have we have we published that? No.

Michael J. Franco: We are gonna we are gonna we are gonna publish a year end, Jana. So wait a little bit longer.

Steven Roth: We wanna give the lady a break and shadow it, I would I would rather see what the numbers look like based on the final. So, you know, wait 2 or 3 months. We already have the final budget, but that is okay.

Michael J. Franco: We are gonna we are gonna probably deliver units late 28 or early 29. 2029.

Operator: The next question will come from Dylan with Green Street. Please go ahead.

Analyst: Hi, guys. Thanks for taking the question. Steven, you mentioned, you know, having 2 assets in the advanced stages of the sale process. Are you able to share any light on what potential total proceeds can be? Has pricing throughout those discussions changed at all now that rates are higher? You know, can you talk about the bidding pool, just anything like that?

Steven Roth: You know, not really. The proceeds if all goes well, and there is no assurance of that, for both of them, will be over $1 billion of new free cash. Obviously, earnings will be nicked a little bit because we are taking earnings out of the system. Pricing is pricing has wobbled a little bit as you would expect as interest rates have risen. Appreciate that color. And then maybe just as it relates to use of proceeds, I mean, I know in the past, you have mentioned that you view the stock as sort of very, very cheap So is that a potential opportunity?

Are you guys going to sort of save cash for the balance sheet given some of the development Can you kinda just talk about sort of the use of those proceeds? it is premature to talk about what we what we would do from a capital allocation point of view with money that we do not yet have in the house. But I can tell you, as I said a few minutes ago, that the capital program that is in process now has already been handled. So I look upon this capital as being pretty much available for opportunistic investment, buy back stock, make investments whatever.

But when we get to that point, we are not at that point yet, but we get at that point then, you know, we will we will we will we will, you know, make you aware it.

Operator: The next question will come from Vikram Malhotra with Mizuho. Please go ahead.

Vikram Malhotra: Good morning. Thanks for taking the questions. I guess just wanted to go back to the run rate you alluded to into 2027. And maybe into 2028. Just to clarify, you mentioned sort of a good run rate, but then there are offsetting factors like interest expense. Did you mean that run rate And then we need to x that run rate for those offsetting or that is sort of a good net number to think about going to 2027? And it. Because it kind of felt like a little bit of a push out of the growth you have been calling for into 2027 now into 2028. Could you just clarify that?

Michael J. Franco: Yep. Morning, Vikram. Just a net number.

Analyst: So that factors everything in.

Vikram Malhotra: So that would be for the higher interest expense, any asset sales you may do or anything else, any known move outs that you have as of you note as of today, that would be sort of the true, like, a good run rate in the 2027.

Michael J. Franco: Correct.

Vikram Malhotra: Okay. And then just on the street retail, I guess, bigger picture opportunity. You know, a, would you have a sense or give us some comps, like, how should we value the business today? Like, I know there are very few marks for how to think about cap rates for your asset type or your quality of assets. And then maybe any bigger picture like numbers around the full bigger redevelopment because you have talked about a bigger opportunity at Penn Station, and I do not know if there are others as well. But just how should we think about a potential NOI uplift?

Michael J. Franco: Look. On the on the street retail, you know, what we own is absolutely unique. Right? The 5th Avenue assets are you know, when you think about the number of assets that are not owned by users or landmarks or whatnot. Right? There are very few blocks available on 5th Avenue. For lease or for sale. And we own a handful. So those are scarce, very valuable assets. And there is a reason they do not trade off and because, you know, be. Because they are like that. So you know, you saw the Uniqlo transaction we did. Which was, you know, a very low cap rate. And I think Fifth Avenue continues to command those type of cap rates.

You know, and they continue to attract user interest. At. You know, I would I would definitely tell you sub 5% cap rates. And it could be much more aggressive than that. You know, Times Square again, what we have there is you know, the 2 best blocks, you know, dead center bow tie, with signage attached to it. You know, probably the most world famous signage in the world and the numbers that come off that are significant. So again, that has not really been tested, but those are gonna command premium cap rates too.

So those are, you know, those are the absolute pinnacle in terms of what retail values are and will be And, you know, I think the rental market has recovered significantly as well back to where rents are, you know, basically back to either at peak or pretty close to peak there. Your second 1, I did not quite understand Penn Station in terms of, I think, the retail opportunity. You know, redeveloping the 34th And 7th Corridor.

We have, you know, significant aspirations for that, both the retail and the signage. there is still other retail income to come out, you know, and other pockets, whether it is what we are gonna do at 34th And 8th, you know, still in the concourse etcetera. I cannot give you a precise number. I am gonna have to aggregate that. So I would rather than guess. You know, we will we will come back on that. But, you know, we think the opportunity is meaningful, and that in addition, I think just helps drive office rents as well.

The more we place make there and create that unique atmosphere, which I think we have done with all the restaurants, F and B we put in. that is gonna continue to accrue to the office rents, which we are, you know, achieving. And, you know, again, I think it is worth pausing on when you think about the numbers that we are achieving in pen 1, PENN2, 125, $135 a foot rents relative to where we originally published those budgets. You we are well ahead. that is what we aspire to eventually. We have gotten there quicker. And there is a lot more room to run-in terms of the office rents.

Operator: The next question will come from Anthony Paolone with JPMorgan. Please go ahead.

Anthony Paolone: Great. Thanks. My first question, Michael, just on this 27 and the trajectory that you are talking about, it seemed like the prior expectation was, you know, maybe something in the 2 seventies for next year and now seems about $0.10 to $0.15 inside of that. And so wondering as you think about this 2-year planning that you all do, should some of that come back in 2028 and sort of the trajectory, I think a lot of folks have been anticipating is still intact? Or is that kind of $0.10 to $0.15 implicitly that it seems to be coming in here a little bit gonna persist because of interest cost? Or whatever the case may be?

Michael J. Franco: Yeah. Just to be clear, Tony, the. When I think to Vikram's question, you know, the net number sort of factored all that in. So I am not sort of backing off what I said last quarter, $0.10 to $0.15. I think that sort of run rate continues and the run rate beyond that in terms of what we look at in growth is, you know, quite significant. So I am not gonna give you precise numbers, but I am looking at a latest budget that factors everything in, you know, some higher interest rate, We roll over debt or hedges or whatnot, and you know, that significant growth remains intact, and I am not backing off 2027.

Anthony Paolone: Okay. Thank you for that. And then second 1, maybe for Glen, just you talked about a lot of the leasing and how aggressive the tenants are being with taking down space, what is your sense as to what the utilization of the space is today versus our tenants increasingly taking road space? Just trying to understand what they are thinking of as they plan for their space needs.

Glen J. Weiss: Oh, okay. I think utilization you know, is now at least 4 days a week, if not 5. Particularly in New York and per. Particularly in our buildings. Our buildings are humming just as they were in 2019. And in terms of growth, you are seeing a lot of growth out of the law firms, of the financial companies, out of tech. I mean, everywhere you are seeing growth. And then, you know, with the lack of available supply, that is good space.

You are seeing renewal activity increase and tenants accelerating those discussions now, which allows us, you know, to get into deal mode benefiting us much earlier than we had been, you know, a year or 2, 3 years ago. So utilization is very high. Growth is very accelerated. And the renewal market is now, you know, robust because there is just no space out there that, you know, worth looking at for a lot of these tenants.

Steven Roth: Anthony, before we let you go, I gotta give you the gold star for today. Your 350 Park analysis, while it was not 100% dead on, it was pretty close. So kudos for your analysis.

Operator: The next question will come from Seth Bergey with Citi. Please go ahead.

Seth Bergey: Hi, good morning. Thanks for taking my question. I just wanted to touch on the 2027 expiration schedule. What proportion of that space is kind of currently under active discussion for leasing? And I guess, more broadly, with tightening availability of high quality space in New York, are you starting to see tenants address expirations earlier just to secure their space given that the tightening of availability.

Glen J. Weiss: Yes. On your second point, I just discussed that. You know, absolutely, there is an acceleration on renewal discussions. Very much. So we are seeing that across the board. On the major expiration for 2027, you know, we have action on all of it. We have a little over 1 million feet, you know, coming available. We have good action, good mark to market, really strong starting rents. A lot of activity as you would expect in this type of market.

Seth Bergey: And then just with again, kind of some of the leasing momentum that you are seeing within New York, are you seeing any changes to kind of lease economics specifically just with respect to TIs or free rent that you are offering?

Steven Roth: We are. We are seeing a bunch of things Number 1, rents are going up. A lot. The tenants are less rent-sensitive. Number 2, terms are lengthening. Longer. Much longer. Which is also a very good thing. We are seeing TI tighten and free rents tighten. It depends a lot on the term of the lease. And also the rent. So on the TIs on, you know, on new construction where you are seeing these rents at $300-plus, you are seeing higher TI But on the bread and butter leasing, you know, TIs are tightening. Free rent as well. But, you know, much more so what we are seeing is rents are up.

And terms are longer, which is very important.

Operator: The next question will come from Michael Lewis with Truist. Please go ahead.

Michael Lewis: Great. Thank you. I was going to ask about 350 Park. How should we think about the upside or downside risk left in that 9.2% projected cash yield. So obviously, you have leasing and rent assumptions, but also know, construction costs that are not locked, Just thinking about upside or downside in the underwriting there. And then, I guess, not in the unlevered number, but interest rate risk as well, or do you expect to hedge that I think the most important point is you know, we have a.

Michael J. Franco: We have an anchor tenant lease for a little over a million square feet. Which you know, ensures a pretty attractive outcome. So the question is, you know, what is the spec space is going to lease for? that is the that is the course, a risk we know we are taking. And, you know, that spec space is at the top of the building. They may do that best space to market. So we are bullish about that opportunity. And, you know, I think there is know, there is there is certainly upside in what we projected. Of course, the market can change with downside.

But with the anchor tenant lease, you know, the variability on what the ultimate yield is you know, is a little bit tighter. You know, we obviously financed in this market. And you know, that budget reflects what the what the curve is notwithstanding You know, we are hedging that out, some period of time. And then on the construction costs, my comment is it is 60% bought. With another 20% soft circle. So we are in We are in good shape.

Steven Roth: We are in good shape. We have a very, very, very strong outlook as to what the building will cost.

Michael Lewis: Okay. Great. Thank you. And then lastly for me, I do not know if there is anything you could share regarding the dividend you expect to pay this year. And I was wondering if the 53 Park JV gain would impact your taxable minimum at all.

Michael J. Franco: No. The latter question, no.

Operator: Okay. The next question will come from Alexander Goldfarb with Piper Sandler. Please go ahead.

Alexander Goldfarb: Hi. Good morning, and thank you. And, Steven, I like the, the Turkey tradition. that is pretty cool. So I have 2 questions for you. The first question is, you guys have said for several quarters now that tenants really are not price sensitive when it comes to rent. Thinking historically, you always hear about companies that were trying to get the best deal. And now they seem to. You know, they cannot pay enough in rent.

So are either 1 companies and tenants accepting higher rents as a percent of their operating cost structure, or is it that the tenants' profitability has so vastly increased over the past number of years to paying 2 or 300 whatever the new market rents are, is really not a deal--an impact to them because as a percent of their operating cost it is no different than when rents were 90 or $100.

Steven Roth: Alexander, I do not remember anybody on my team ever saying that tenants do not care about the rent they pay. The our customers are responsible and each rent negotiation is relatively intense. And done by responsible parties on both sides. So the tenants do care about every single term in a lease. So I would disabuse you of that. I wish it was not so. But every lease every lease is contested. No. I understand that, Steven.

Alexander Goldfarb: But it seems like right now the tenants are accepting significantly higher rents than historically. I did not mean to be disparaging or dismissive. Of course.

Steven Roth: The marketplace is demanding that rents go up aggressively Construction costs scarcity and interest rates all are factored into that. Tenants are realistic. They are very well advised. They know when they have to. They what they have to pay. And in order to make a deal, they are willing to pay the lowest price they have to pay in order to make a deal. That lowest price turns out to be higher than it was yesterday and the day before, that is the market.

Alexander Goldfarb: Okay. The second question is on 888 Seventh Avenue, is there any update on the ground rent, renegotiation The loan has been in special servicing as you guys address the ground rent reset. I am just curious if there is any update on that process.

Steven Roth: No, sir. There are no further questions at this time, sir.

Alexander Goldfarb: Okay. Thank you.

Steven Roth: Actually 3 or 4 days. 3 or 4 years away. It is 2 years away. 2 years away. So it will start pretty soon. Thank you.

Operator: The next question will come from Ronald Kamdem with Morgan Stanley. Please go ahead.

Ronald Kamdem: Hey, great. Just 2 quick ones. Starting with the same store NOI commentary, I think you said the 8-plus, 8% to 9% this year, that could continue into 2027 and 2028. And just wondering if that was correct and if there is the move outs or all that other 1 timers that you mentioned was sort of factored in. And how we should think about that? Thanks.

Michael J. Franco: Good morning, Ronald. So I do not I do not know that I said a specific number. What I said is that the strong same store numbers with continue certainly through that period. Maybe a little higher, maybe a little lower. But it is gonna be quite strong, and I think, certainly with respect to New York office, it is gonna it is gonna be, you know, at or above those numbers. As I look through 2027. So retail's a little bit lumpy. But overall, the numbers are gonna be, you know, sort of in that in that certainly an average for the year and definitely for the office.

Ronald Kamdem: Okay. Perfect. And then my follow-up was just going to be if I think about the recurring CapEx for this year, to annualizing it, I have it at about $167 million. Obviously, a lot of leasing has been done, so this is good news. But how do we think about what that run rate could be and how much that could come down as you take occupancy? Thanks.

Michael J. Franco: You know, I think the next year or 2 is still gonna be high just given, you know, we are we are funding the leases that either have been signed or will be signed You know, I think as you know, there is a lag effect, you know, when we sign these leases and when the tenant actually calls for the capital, it tends to be difficult as actually quite a bit later than we would normally expect. So you know, that. that is gonna flow in the next year. And then, you know, next year, the lease is gonna the following year.

But I think couple of years out, they will start to, you know, come down you know, as the portfolio reaches the kind of stable numbers we have talked about.

Operator: There is time for 1 additional question. Caitlin Burrows with Goldman Sachs. On the line with the final question for the call. Please go ahead.

Caitlin Burrows: Hi, good morning everyone. Maybe just on the leverage path, I see that you guys are at 7.9x now. So with all that you have going on, development wise, EBITDA upside, possible dispositions, how do you see that shifting over 2027 and 2028, or what level or range you think you will aim to manage around?

Michael J. Franco: Know, we are not we are not managing around anything. We like having a strong balance sheet. We are proud of the you know, progress we have made. And I think just if you look at the what is the natural you know, where does it sort of naturally settle out to given the income coming off line? You know, it is gonna continue to trend down, you know, we think in the probably the low 7s. You know, by the end of next year beginning of, following year.

Steven Roth: The biggest thing in that calculation is the income which will be coming on board will force that metric lower. And, of course, the money. The capital we have to spend will force it higher. So that battle, I think, will go favor of a more favorable metric.

Caitlin Burrows: Got it. Okay.

Steven Roth: Enormous amount. there is an enormous amount of income coming online which will help that metric enormously.

Caitlin Burrows: Mhmm. Okay. And then just to follow-up on the lease expirations in 2027, I was wondering to the extent that you previously signed renewals on 2027 expirations, are those shown in the lease expiration table as 2027 expirations or in the New Year? So, like, are those unaddressed lease or all lease expirations, if that makes sense?

Steven Roth: Oh, that is that is a good question.

Michael J. Franco: Yeah. So to the extent we signed a renewal that would get taken out of 2027 and pushed to the year that it then expires.

Steven Roth: That sounds logical. Good.

Operator: There are no. Are no further questions at this time, sir. There are no further questions at this time, sir.

Steven Roth: Phil, I will tell you, thank you all very much for joining While we have been talking, we have gotten multiple requests for turkeys from not affiliated listeners on this call. So I guess the message is, Happy Thanksgiving to everybody. it is a wonderful American holiday, and wish everybody well. We had what we consider to be an outstanding quarter, and we are anxious to see you again on our next call in 3 months. Have a good day, everybody.

Operator: Ladies and gentlemen, this concludes today's conference. Thank you for your participation. You may now disconnect.

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